EUR/USD analysis: dollar weak, but bullish only above 1.2370
|EUR/USD Current price: 1.2334
- US Federal Reserve rose rates 25 bps as expected, but anticipates just two more hikes for this year.
- Thursday's macroeconomic calendar to be quite busy, with preliminary Markit PMIs.
The common currency was among the weakest currencies across the FX board during the first half of the day, despite the greenback started it with a soft footing against most of its major rivals. The EU macroeconomic calendar remained empty in the Union, and while bulls attempted to push higher, the pair faltered around 1.2300 ahead of Fed's decision. The pair, however, recovered the 1.2300 mark as the US Central Bank disappointed, as the Fed raised rates as expected, but the dot plot suggests that there are only two more rate hikes ahead of this year, not three. There were no dissenters to the hike and the statement was generally positive, as it included modest upward revisions to US growth forecast for 2018 and 2019, but that was not enough for dollar's bulls. In fact, and during the press conference, Powell said that nothing in data indicates that inflation is about to accelerate, fueling the American currency's sell-off. He tried to down talk the relevance of the dot-plot, insisting that the rate hike is the main event. Anyway, speculative interest disappointment is clear, as the greenback is down across the board.
Thursday will bring quite a busy macroeconomic calendar with preliminary March Markit PMIs for the EU area, the German IFO survey, and US Markit PMIs alongside with the usual weekly unemployment claims figures.
Technically, bulls are still lagging behind bears, as the pair is just modestly positive short-term, with indicators trying to advance within positive territory but the price unable to establish above its 200 SMA, in the 4 hours chart. In the mentioned time frame, moving averages are confined to a tight range and with no directional strength, reflecting the absence of a clear direction. Despite broad dollar's weakness, the pair needs to break beyond 1.2370, where it has a daily descendant trend line coming in from this year's high at 1.2554 achieved last February, to offer a more upward constructive outlook.
Support levels: 1.2300 1.2260 1.2220
Resistance levels: 1.2370 1.2410 1.2445
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